While I don't think you ever have a true "obligation" per say, I'm sure the degree to which such gifts are customary varies by location. Here it's pretty much expected that each student gives *something*. While some families go all out, small items like a $5 gift card to Starbucks in a homemade card aren't uncommon. I'd say in my area it's expected like tipping a restaurant server - you're probably going to do it unless the "service" was truly atrocious. But keep in mind that my son's school is composed of primarily middle class families.
